The term “Family Business” has many meanings. The term can be defined as any commercial enterprise, where decision making is influenced by several generations of the same family. This includes blood relatives, marriage partners, and adopted children. The business is typically managed by family members who are willing to pursue distinct goals for the organization. Here are some of these goals:
Creating a culture of engagement
A company culture of engagement is essential for sustainable growth. Creating a culture that promotes employee engagement will help a business become more profitable and achieve team synergy. Research shows that when an organization is able to attract and keep highly engaged employees, it is much easier to stay motivated and grow. Without a culture of engagement, these strategies won’t be successful. Here are several ways to create a culture of engagement in your family business.
First, make sure you understand your culture. Many family businesses have an authority-based or patriarchal culture. However, if you want to build a culture of engagement, you must encourage learning, adaptability, and courage. You must invest in your people and communicate your vision and values, and be approachable and transparent about the goals of the company. If you want your business to stay relevant and grow, the culture of engagement needs to be supportive of all team members, including the future leaders.
Building a succession plan
Creating a succession plan for a family business requires that the controlling owner of the business have updated powers of attorney and designate an appropriate transfer-on-death beneficiary on their stock. Creating a living trust may also be necessary for avoiding the delay caused by probate. An attorney should work to create a succession plan that will identify a successor and provide a plan for the replacement of the controlling owner.
The purpose of the succession plan is to make sure that the business is protected. Assumptions about the next generation of business owners are unwise. While working with family members is often complicated and fraught, it’s essential that the family understands the business’s goals. Having confidence in the succession plan can give the family the assurance they need to accomplish these goals. However, this process can be daunting if you’re the only person left running the business.
Managing conflict in a family business can be a difficult task, but it can be a critical component of business success. Managing conflict is necessary to create a harmonious environment. The natural separation between work and family in corporations, for example, makes workplace conflicts unlikely to result in serious consequences. However, family firms often lack formal processes for conflict resolution and management. In such cases, it is important to implement a formal conflict management process, including a board of advisers, in order to protect the business.
While avoiding conflict altogether is never a good idea, a constructive approach to the problem can help prevent further damage and improve the family and business’s overall health. A family that understands how to manage conflict can ensure long-term productivity and resilience. However, avoiding conflict and ignoring it can waste valuable resources such as reputation and human capital. Here are six steps for family business conflict management:
Attracting, aligning, and motivating employees
Attracting, aligning, and motivatng employees for a family business requires specific strategies. For example, human resources managers should emphasize the importance of qualifications for promotion and services that can be compensated. Family businesses need people with outside experience and perspectives to survive. This requires setting clear expectations and standards of behavior before the first day of work. Moreover, employees who work for a family-owned business must be treated fairly and with respect.
One of the most important aspects of attracting, aligning, and motivating employees for your family business is the creation of a family-centric culture. The family capital is an important asset for a family business and is the key differentiator. It expresses itself as the ethos, culture, and network of the business. While hard metrics linking family capital to business performance are not readily available, the benefits are significant. A strong culture fosters loyalty and commitment, and it is also a source of competitive advantage.